David Charles: Inside the Operational Architecture of Scaling a Legal E-Commerce THC Dispensary

As part of my series about “5 Things I Wish Someone Told Me Before I Started Leading a Cannabis Business” I had the pleasure of interviewing David Charles.

David Charles is a growth marketer, storyteller, and serial entrepreneur. Currently, he serves as the Co-Founder, CEO, and COO of MOOD, a surging e-commerce dispensary that produces legal, high-quality THC products tailored to set your mood.

Thank you so much for doing this with us! Can you share with us the story about what brought you to this specific career path?

Thanks for having me! My earlier career was spent in productized e-commerce, mostly as a founder. I later got into telehealth and healthtech. I slotted into those spaces easily because I’m good at balancing commercial sensibilities with product, and that’s basically the core challenge in tech. But I really missed being an entrepreneur. I’m stubborn and have a high-risk tolerance. I love starting from 0 and building orgs. I was approached by a friend with this opportunity, and it was a no-brainer to turn down a tech COO job and do something audacious.

Can you share the most interesting story that happened to you since you began leading your company? Can you tell us what lesson you learned from that?

Thankfully most weeks, there’s something interesting happening. You have to learn to make friends with and smile on uncertainty — it’ll be with you your whole journey.

I’ll share an early event. I’d just leased us a warehouse space in Austin, just in time for our launch date 6 weeks later. Then 2 days after, Texas banned the processing of industrial hemp. You could sell it, smoke it, and possess it… but could no longer have a warehouse where people work with it — crazy.

We really didn’t want our launch delayed. I really worked my network on this one.. And 4 days later had a signed WH lease in another state. I moved there a week later and stayed for 3 months over the Summer.. Quite an adventure. But it’s simply what needed to happen.

It was the first big “move” I made with this company, and I learned to trust my decisions. I learned that the decision-making abilities I’d previously developed do translate to this space and that home truly is where you make it.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

Buying a bargain industrial cooler that ended up being an utter nightmare and creating a huge faff with maintenance people, moving people etc. This cooler became the bain of my existence and ended up requiring 6 electricians, 4 moving companies, 2 random forklift guys from other warehouses paid in cash.. And a lot of headaches before it was sorted.

The takeaway here is that unless you really know what you’re doing: it’s cheaper to pay the whole freight.

Are you working on any exciting projects now? How do you think that will help people?

So many. Product recommendation engines. Website componentry that crowdsources product effects. Data models for hedging churn. Functional gummies with extremely thought-out nutra components. A whole host of new edibles, including freeze pops.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story?

My Co-Founder, Jake. I’d spent a couple of years working in early-stage tech, which is another way of saying I was in no place to self-fund an inventory-heavy company with tons of early CAPEX needs. But Jake saw the opportunity and Jake backed me as co-founder: he self-funded $1m and always believed that I was the right operator to bring this to life with.

This industry is young, dynamic and creative. Does your company use any clever and innovative marketing strategies that you think large legacy companies should consider adopting?

Well, the digital cat is out of the bag. But we do some interesting things with the way we test that I think leave most legacy companies in the dust. For one, we keep the scaled channels in-house. The unit economics of digital ad agencies mean they necessarily will not do as good a job as a proper in-house team. Yet so many companies end up with mediocre results because they don’t truly understand DTC digital and get snowed by agency BS / don’t know how to build a proper org themselves.

Can you share 3 things that most excite you about the Cannabis industry? Can you share 3 things that most concern you?

Excite: selling products that truly improve people’s quality of life, the massive opportunity in a space with largely unsophisticated players, the emerging science we’re on the bleeding edge of.

Concern: bad actors selling bad products, big MJ are doing their best to limit our opportunities legislatively, maintaining supply chain integrity as the space expands.

Can you share your “5 Things I Wish Someone Told Me Before I Started Leading a Cannabis Business”? Please share a story or example for each.

• This space is largely devoid of institutional sophistication. Most suppliers/ vendors/ brands/ retailers/ etc. are run by people who little experience running a real business, and certainly would be out of place at a table of real operators. This can be extremely frustrating but embrace it. It just means there’s more opportunity for people willing to run proper companies.

You need to become an expert in the product.

• I never realized how complex these products are. It took massive effort to be in a place where I understand cannabis enough to make good decisions around our product line.

The warehouse is the lifeblood of the company.

• It’s a no-brainer at this point, but the warehouse org is the front-line for many elements of customer experience. You need a superb leader running it who’s highly engaged and works cross functionally with finance/ vendors/ CS/ etc.

Most enterprise vendors won’t work with you.

• From banks to merchant processing to mainstream SAAS. Good luck.

This business should be run like tech, not like weed.

• Expect to bring your A game as an operator. Be product agnostic and make decisions with frameworks used in more mature industries. Be customer obsessed and leave your ego at the door.

What advice would you give to other CEOs or founders to help their employees to thrive?

Challenge them continuously. People love rising to the occasion. Don’t micromanage: let them figure it out and coach them on areas you think will help them figure it out better the next time. Strive mightily and inspire them with action.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

I’d make blue-collar tech trades something taught in high school. Entry-level graphic design/ video editing/front-end dev work pays $20-$50/hr on freelance sites. Wouldn’t it be great if people were equipped to enter these markets instead of taking out $200k in debt to go study basket weaving at some 3rd rate college/ resort?

What is the best way our readers can follow you on social media?

IG: Davidpaulcharles

LinkedIn

This was very inspiring. Thank you so much for joining us!